Downside risks to growth persist

The odds of soft-landing have increased with inflation moving closer to the target and growth holding up better than expected in major advanced and emerging market economies

On Thursday, in his post-Budget monetary policy statement, the governor of Reserve Bank of India (RBI) projected for the next financial year (FY25), real GDP growth at 7.0 per cent and the consumer price inflation at 4.5 per cent. The growth projections appear somewhat optimistic given the prospects of export growth, domestic consumption and private investment.

The governor said that India’s potential growth is propelled by structural drivers like improving physical infrastructure, development of world class digital and payments technology, ease of doing business, enhanced labour force participation and improved quality of fiscal spending. While few would contest that statement, the